Daily Archives: September 20, 2006

Wal-Mart, the nation’s largest retailer, will test a program to sell generic prescription drugs to its workers and customers at sharply reduced prices, according to people briefed on the plans.
The giant discount chain, which has used its size to knock down the costs of toys, clothing and groceries, will sell generic versions of about 300 widely prescribed drugs for as low as $4 for a standard prescription, these people said, speaking on condition of anonymity because they were not authorized to disclose details of the new program. On average, generic drugs cost between $10 and $30 for a 30-day prescription.

The company, which is frequently criticized for its employee health benefits, is expected to announce the program today. A company spokeswoman declined comment.

Wal-Mart will test the lower prices first in the Tampa, Fla., area and, depending on consumer response, may expand the program around the state and the country, these people said.

The experiment appears to mark the first time that Wal-Mart has used its unrivaled influence in the American economy to lower the cost of health care for its customers.

In the past year, the company has introduced several programs to improve its benefits for workers, like extending insurance coverage to the children of part-time workers and starting a benefit plan with monthly premiums as low as $11.

Still, critics complain that at Wal-Mart health insurance is out of reach for many of its 1.3 million employees in the United States, forcing thousands of them to turn to state-sponsored programs or forgo health coverage altogether.

Several states even considered legislation that would force the chain to increase its spending on health care but only one such bill, in Maryland, became law. The law has since been struck down by a judge and its future is in doubt.

For Wal-Mart, the lower generic drug prices could blunt criticism of its health care coverage and prove a boon to business. Wal-Mart’s chief executive, H. Lee Scott Jr., has identified the chain’s pharmacy business as an area that needs improvement, and $4 generic drugs could turn the chain into a destination for those seeking the best prices on prescriptions.

It is unclear exactly how Wal-Mart obtained the lower prices. The chain has at times sold products like toys at a loss to entice consumers. But given its size it is possible the company has negotiated lower prices with health care providers and drug companies, industry experts said.

The new generic drug program is expected to be announced this morning at a Wal-Mart store in Florida, with senior company executives and elected leaders in attendance.